The US economy continues to advance at a solid pace. Real GDP growth for 2Q18 was revised up a tick to 4.2% (seasonally adjusted annual rate), and a strong consumer confidence index and manufacturing PMI suggest above-trend growth in 3Q18. Consumer spending is further supported by sustained labor market strength and healthy household saving rates. Overall, we expect the economy to grow by 2.9% this year, before slowing to 2.2% in 2019. On the price front, inflation is firming up. We expect two additional Fed rate hikes this year. The biggest downside risks to our benign baseline arise from trade policy.
The Economic Outlook series provides monthly updates on the outlook for the global and US economies, and quarterly updates for China and Canada.